With little outside support, millions of women provide essential care for their kids, aging spouses, parents, and other adults with disabilities. But the COVID-19 pandemic highlights that their cost-free service is attached to a big price tag, especially for women and the health of the economy. According to AARP’s report on the Economic Impact of Supporting Working Family Caregivers, if employers and governments put in place more supports for working family caregivers, the U.S. gross domestic product would jump an extra $1.7 trillion by 2030, or 5.5% over current projections.
This boost is equivalent to the economy of New York State. Moreover, the GDP could rise to $4.1 trillion, or 6.6% of the entire U.S. economy, in 2050. The economic impact would be even larger if supports were extended to all caregivers. If anything, this research shows that we need to take a closer look at the individuals behind these numbers.
Moreover, the lack of support has a long-term, negative impact on caregivers who also work outside the home. Women who left their jobs during the pandemic have lost economic security, which may affect them for the rest of their lives. Employers have lost productive employees who are buckling under the demands of balancing caregiving duties with demands of the workplace. Needlessly, the economy has lost an engine of growth.
Even before the pandemic, 53 million Americans were caregivers in 2019—61% of whom were women and many with paying jobs. They provided an average of 35.7 hours of weekly care, or roughly the equivalent of a full-time job by itself, to an adult age 50 or older or a child with special needs. By February 2021, 2.3 million fewer women (including 606,000 Black women and 618,000 Latina women) were in the U.S. workforce than in February 2020, before the pandemic. As schools closed, and COVID-19 rampaged through long-term care facilities, many women left their paying jobs to help their loved ones.
This issue is larger than the pandemic, however. Caregivers who work have long run into serious obstacles. They face conflicting demands for their time, and they report discrimination in the workplace, with Black caregivers describing this phenomenon at higher rates than white caregivers.
So it is no surprise that women drop out of the workforce and retire early at a rate three times higher than men due to caregiving responsibilities, an effect we see most frequently among women with low incomes.
The challenges of caregiving and work falls on women
The pressure of caring for a family member, while holding a job can weigh on individuals and their health. Six in ten caregivers (61%) work while also caregiving. Almost one in four (23%) say caregiving has made their own health worse, up from 17% in 2015. These hard-working individuals are at heightened risk for chronic ailments, stress, depression, and loss of sleep.
Evidence is also emerging that caregiving poses a financial sacrifice for women in particular—a cost that undermines the U.S. economy. Working caregivers often lose income, savings, and benefits that would enhance their financial security in retirement. Quitting jobs, shifting from full- to part-time work, or resisting promotions that would limit flexibility to provide care at home can all undermine long-term financial well-being.
The financial impact of these disruptions can last forever. Men typically benefit from compounding interest on their retirement accounts from an early age, whereas women often have more gaps in their work history. These disruptions can contribute to lower pay for women over a lifetime–by one estimate by the Institute for Women’s Policy Research, this can be anywhere between $531,000 and $800,000 in unequal pay, and significantly less retirement security, including lower Social Security benefits.
According to an AARP estimate, the unpaid contributions of caregivers who tend to their adult family was $470 billion in 2017, alone. This amounted to more than the total out-of-pocket healthcare spending of all Americans that same year. But value is just a fraction of the reward awaiting society if we did more to support family caregivers: Strong workplace-caregiver supports could add 5.2% more jobs and an extra 5.6% in wages and salaries in 2030 than are currently projected. Yet few employers provide comprehensive support. Helping women caregivers work, save, and invest should be higher priorities for both the public and private sectors.
Recommendations for change
The solution to see a difference is right in front of us. Help lies in a combination of paid family and medical leave, paid sick leave, care subsidies, affordable and reliable long-term care insurance, respite services that relieve caregivers, counseling, employee resource groups, flexible work arrangements, and phased retirement to allow caregivers to juggle paid work and care.
Flexible subsidies for dependent care, as well as a provision for backup care can make a huge difference. Importantly, working caregivers must be able to tap such supports without facing discrimination or penalties. A federal family caregiver tax credit, as in the Credit for Caring Act, would also help eligible working family caregivers. Policies like these will help not only caregivers but also their employers: those who depend on them and the entire economy. Investing in resources that support employees with caregiving responsibilities can reduce turnover and absenteeism, increase engagement, and help to attract and retain talent.
Our neglect of this issue is costly, and the severity of need will only increase as the current Baby Boomer generation becomes older. The pandemic reminds us of the critical role played by women family caregivers. By providing support to these women across their lifespan is a key to building a post-pandemic economy that is stronger than ever.
Sallie Krawcheck is the cofounder and CEO of Ellevest, an online advisor that specifically caters to the financial needs of women.
Debra B. Whitman, PhD, is the executive vice president and chief public policy officer at AARP.